Debenhams Group has returned to growth in the latest quarter as its major turnaround strategy begins to deliver results. Shares in the company, which also owns Boohoo and Pretty Little Thing, surged approximately 25% in early trading.
The retailer, rebranded from Boohoo Group last year, had experienced declining sales amid consumer financial pressures and intense competition from rivals such as Shein and Temu. In response, management accelerated a turnaround programme focused on cost reduction to boost profitability.
On Wednesday, Debenhams reported that gross merchandise value, its key sales metric, increased by 0.5% in the quarter ending May 31 compared to the same period last year. This marks a recovery from a 5% decline in the previous quarter. The company noted particularly strong growth in May, with an 8% rise driven by robust performance from its Pretty Little Thing and Debenhams brands.
The retailer stated that the recent strong momentum gives it confidence in achieving double-digit earnings growth for the full year. It also confirmed it remains on track to eliminate £100 million in costs by next year as part of its profit improvement efforts.
Dan Finley, group chief executive, commented: “This is the result of the heavy lifting of our multi-year turnaround: the move to an asset-light marketplace model, warehouse consolidation, cost reset, and rebuilding every brand on a single proprietary platform. That work is now translating into materially improved profitability, with adjusted EBITDA margin expanding and a substantial increase in adjusted EBITDA alongside significantly improved cashflows.”
In other fashion news, Zara owner Inditex shrugged off concerns related to the Iran war to deliver stronger sales. The Spanish retail giant reported sales growth of 5.8% to €8.7 billion (£7.5 billion) in the first quarter of 2026, driven by positive demand for its spring/summer collection. Earnings rose by 7.3% to €2.6 billion (£2.2 billion) for the period.
